* Concerns over Brexit vote keeps traders on edge
* Silver jumps 7 pct, gold 1 pct before paring gains
* U.S. markets closed for Independence Day holiday
* GRAPHIC-2016 asset returns: http://reut.rs/1WAiOSC (Updates prices)
By Jan Harvey
LONDON, July 4 (Reuters) - Gold rose on Monday as political uncertainty after Britain's vote to leave the European Union supported prices that had been propelled towards last week's two-year high by an overnight burst of short-covering activity in China.
The precious metal reached a peak of $1,357.60 an ounce overnight, less than $1 below last month's high, before easing back below $1,350 an ounce.
Silver benefited from a surge of buying in China, rising more than 7 percent at one point and breaking above $21 an ounce for the first time in two years. The metal has also benefited from strong technical signals. gold XAU= was up 0.7 percent at $1,350.87 an ounce by 1520 GMT, while U.S. gold futures GCv1 for August delivery gained 1.1 percent to $1,353.70.
"The Brexit vote caused uncertainty and most people don't like that," Commerzbank (DE:CBKG) analyst Carsten Fritsch told the Reuters Global Gold Forum on Monday. "Uncertainty leads to volatility in financial markets and to a rush into safe havens such as bonds and gold."
A post-Brexit recovery across European markets stalled on Monday, with major share indexes mixed. MKTS/GLOB
Holdings in the world's largest gold-backed exchange-traded fund, SPDR Gold Shares GLD , rose by 3.9 tonnes to 953.91 tonnes on Friday, the highest since July 2013. In the first six months of the year its holdings rose by 308 tonnes, its biggest half-yearly increase in seven years. GOL/ETF
The U.S. markets are closed on Monday for the Independence Day holiday.
Silver XAG= was up 2.9 percent at $20.30 an ounce, benefiting from a perception that it offers good value compared with gold.
The gold/silver ratio, which measures the number of silver ounces needed to buy an ounce of gold, fell to a two-year low on Monday as silver extended gains after its biggest weekly rise in nearly three years.
The Shanghai Exchange Futures went limit up overnight, with onshore players having covered short positions aggressively in the past few days, especially on Monday, one analyst with an international investment bank said.
"There is a little bit of a two-way battle going on in silver with a number of players going short in China," the analyst said.
Hedge funds and money managers raised their bullish positions in COMEX gold and silver contracts to record highs in the week to June 28. XPT= was up 0.1 percent at $1,059.75 an ounce, while palladium XPD= rose 1.5 percent to $613.
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http://reut.rs/1WAiOSC
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